Europe

European Union‘s neo-liberal "Lisbon agenda"

In March 2000, the European Union summit in Lisbon adopted the US
economy as their model. It was before the so-called ‘new economy‘ was
exposed as a myth and before the stock market bubble burst. The
assembled mainly social democratic prime ministers and presidents agreed
that the US economy was superior on everything - growth, job creation,
attracting investment etc.

The result was that the ‘Lisbon Agenda‘ aimed for massive privatisation
and deregulation. A detailed timetable was set up for every field, from
deregulation of telecommunications to employment policy. The overall
target was to make the EU into “the most competitive region in the
world“ by 2010.

For four years, the ‘Lisbon Agenda‘ has been used as a whip to introduce
worsening conditions for pensioners and workers in the member countries.
However, the process has been slowed down by massive protests on the
part of workers and people in general. The enthusiasm among politicians
has further cooled with the poor results of the process itself. Instead
of boosting growth, Lisbon‘s neo-liberal policies have aggravated an
already poor performance. EU-wide, GDP growth for 2003 was just 0.8 per
cent.

The big three

In the run up to the EU summit of 25-26 March 2004, there is a certain
feeling of panic among politicians and economists. The Berlin summit of
Schroeder, Blair and Chirac – the leaders of Germany, Britain and France
– called for the Lisbon process to be stepped up. They want a special
commissioner in the EU for economic and labour market ‘reforms‘.
Pensions, health and employment ‘reforms‘ were also specifically
mentioned. The ‘big three‘ requested the Commission to focus on
‘industry and competitiveness‘.

For the upcoming summit in Brussels, the ‘Centre for European Reform‘ in
London has produced its “Scorecard IV – The status of economic reform in
the enlarging EU“. The concern of this lobby group of neo-liberals is
that European Union politicians have lost their enthusiasm for both the
Lisbon agenda and for enlargement. On the latter, it is obvious that
virtually none of the governments of the present EU still present
enlargement as something positive. Following silence on the subject in
the last few months, enlargement has become something West European
countries now have to defend themselves against.

No alternative

On the Lisbon agenda, it is clear that governments are alarmed by the
struggle of the working class. At the same time, they do not have any
alternative. The attacks on workers, pensioners, women, youth and
immigrants in the Lisbon agenda will therefore continue, albeit probably
at a slower pace.

“Even the most enthusiastic proponents of the Lisbon agenda can only
describe the EU’s performance over the last twelve months as mediocre“.
This is how the ‘Scorecard‘ summed up the present situation. Growth was
0.8 per cent and the number of people in work did not grow. On the other
hand, “Germany deserves special credit for its Agenda 2010 package of
labour market measures, which included cuts to unemployment benefits,
the lessening of employment protection laws and reform of its
job-seeking agencies“. France is praised for pushing through “painful“
pension reforms. Denmark, Finland and Sweden generally “score well“,
according to these neo-liberals, and “Britain, Ireland, the Netherlands
and Spain, are highly committed to the Lisbon process“. Criticism is
mainly directed against Italy, where Berlusconi has failed to live up to
the hope of these right-wingers.

The “key elements of the Lisbon agenda“, according to the Scorecard,
are: - “Liberalisation“ - meaning creating a single market for energy,
finance and telecom , “Reducing market-distorting state subsidies“,
ensuring “that small firms face a more benign environment“, “reducing
the burden of pensions on state finances“ and continuing labour market
reforms. As with most EU decisions, talk about “sustainable development“
for the environment and people are added to camouflage their real
character.

Privatisation

Increased spending on research and development (R&D) is one Lisbon
target. The increases since the year 2000, however, have been small and
the EU still trails far behind the US and Japan. The EU want a bigger
share of R&D to come from private sources, with the EU Commission
advocating tax cuts for companies to encourage them to invest in R&D.

Telecom is one ‘success‘ of the Lisbon Agenda. The goal was to break up
and privatise the former state monopolies. This has taken place, with
the reduction of tens of thousands of jobs. But what about the promise
of lower prices? “Local call prices have not fallen as much as expected
and were no lower in 2003 than in 1997…And in several member-states
including Belgium, Greece, Spain, Italy, Austria, Portugal and Sweden
local call prices have risen over recent years“, says the Scorecard.
Cuts in prices would in fact be more likely if there were no
shareholders demanding bigger profits from the privatised companies.

Gas and electricity are supposed to be fully ‘liberalised‘ by 2004 for
companies and 2007 for households. In Sweden, we have seen the
consequences already, where electricity now is traded in the same way as
shares. The prices (meaning costs to the consumer) can differ from one
day to the next, but in general they have increased dramatically over
the last few years. The energy sector‘s profits, on the other hand, have
increased more than most other sectors.

Water is next. “The Commission is turning its attention to water
supplies. The EU’s water sector has a turnover of 80 billion euros a
year – more than the gas sector“. In Ireland, a mass campaign, led by
CWI members, in 1996 defeated water charges. That kind of campaign will
now be needed in other EU countries.

Victory for dockworkers

Another, more recent, victory over neo-liberalism has been the struggle
of the dockworkers. All over Europe, dockers have been out on days of
action, including strikes, against open tenders for cargo handling. Such
a system would have meant replacing dockworkers with temporary workers
from different agencies competing for the contract. Jobs would be lost
and safety standards undermined. After another new day of strikes and
demos, the European parliament in November 2003 voted down the proposal.

The same parliament, however, wants to speed up “full competition“ in
railway transport. Some governments, including France, have opposed it:
“They point to the sorry state of the British rail network as evidence
of the dangers of rapid liberalisation“. The French government is of
course not on the side of railway workers. They advocate the same path
as the British government – only slower - to avoid both rail chaos and
political repercussions.

“Business environment“

The EU has been planning to have a single financial market by 2005. This
goal seems more and more unrealistic. The Scorecard points to some of
the national tensions involved over the so-called takeover directive.
“German businesses and politicians have fought hard against this
proposal, fearing that prominent German companies such as Volkswagen
could become vulnerable to foreign takeovers“. As a result, member
states can opt out of this proposal.

For all the talk about supporting small businesses, these plans mean the
destruction of local companies when transnationals get free access
across borders. “In January 2004, the Commission embarked on an equally
ambitious plan to create a single market in general services, such as
retailing, travel, leisure and information technology“. The threat will
be greater in the new member states: 50-70 per cent of workers are
employed in small or medium sized companies in Eastern and Central
Europe.

The EU also aims to “make it easier for firms to send workers abroad on
a temporary basis“. A serious challenge will be posed for trade unions
to fight for union contracts for all.

As well as the aim of making the EU as a whole ‘more competitive‘, the
member states also compete among themselves to offer the best
environment for transnational companies. That includes competitive tax
cuts, the worsening of workers‘ rights and lowering of state subsidies.
The neo-liberals, of course, are campaigning against this state aid. Yet
in the year 2001, “The EU 15 provided subsidies worth 86 billion euros,
or 0.99 per cent of EU GDP, compared with 82 billion in 2000.“
Interestingly, the increase was a result of previous neo-liberalism:
“The UK was responsible for the bulk of this increase, as it bailed out
its struggling rail track operator.“ The capitalists are against state
subsidies in general, but of course gratefully accept them themselves.
The state also has to save businesses which represent a ‘national
interest‘, as when the Swedish state bailed out the banks in 1991-94.
Taxpayers, mainly workers, have carried the cost for neo-liberal
experiments, as well as for capitalist crisis.

The Commission, just following its instructions, has ruled that the
French energy giant, EdF, should pay back 1.2 billion euros to the
French state. At the moment, however, the leading politicians seem to
think that their policies have gone too far. At the summit in Berlin,
the ‘big three‘, advised the Commission to go easier on leading national
companies. Health, education and postal services are other areas where
governments want exemptions from EU and Lisbon competition rules. Still,
that would leave the bulk of public sector jobs open for procurement,
meaning private companies could take them over.

Unemployment

Full support for capitalist globalisation and attacks on workers’ rights
have not produced any of the promised results. In 2003, unemployment
increased from 7.7 per cent to 8.0 per cent in the EU. Instead of
dealing with unemployment, the Lisbon agenda stresses employment
targets, with the aim of reaching 70 per cent employment in 2010. This
is completely unrealistic. With 64.3 per cent employment now, “The EU-15
would need to create 15 million extra jobs, and the EU-25 a total of 22
million, to meet the Lisbon employment target“. The member states in
Eastern and Central Europe, joining on 1 May, have an average
unemployment rate of 15 per cent.

In November 2003, the EU set up an expert group, led by former Dutch
Prime Minister, Wim Kok, to propose measures to increase employment.
Their proposals include ones “to make labour market regulations simpler
and more flexible; to re-design social security systems to make working
worthwhile“. In other words, lower level of social benefits and less job
protection for workers. Portugal and France get some praise in the
Scorecard for policies in this direction.

Pensions

Under the headline “Modernising social protection“, the Scorecard brings
up some of the worst attacks on the welfare state, which are, at the
same time, policies which have created widespread resistance. The Lisbon
agenda wants to increase the effective retirement age by five years, to
65, by 2010. Pensions will be based more on private savings and thereby
on a lower level for workers. In Greece, Austria, France and Italy,
these proposals have provoked mass struggle, including general strikes.
Italy‘s prime minister, Berlusconi, even proposed a ’Maastricht on
pensions‘, i.e. common EU rules and targets, as a way to get around
national opposition.

Pensions will continue to be a battlefield. “Germany is also planning to
enact curbs on generous civil service pensions – a step that the French
government has so far shied away from“. Privatisation and cuts in
pensions have gone a long way in the new member states. Many of them are
following the Swedish pensions ‘reform‘, when a pension based on the 15
best yearly earnings was replaced with a pension based on 40 years, as
well as the compulsory privatisation of a part of the pension.

Poverty is increasing in the EU, as a direct result of cuts and lower
wages. 55 million people, or 15 per cent of the population in the 15 EU
countries, were at risk of being in poverty in 2001, according to the EU
Commission. Britain, Belgium and Poland are mentioned in the Scorecard
as countries with a high decree of jobless households.

Twelve crucial months

“The next twelve months are therefore crucial for the credibility of the
Lisbon reform process,“ is the conclusion of the Scorecard. The
neo-liberals fear a slowing down of privatisation and deregulation. The
final verdict on Lisbon in the Scorecard is a poor ‘C’”.

“Any softening of the targets would imply that the EU lacked ambition
for its economic reform agenda“. Yet, they also warn against including
“modernisation of healthcare systems“ in the Lisbon Agenda, making it
too extensive.

The air of crisis surrounding the Lisbon discussion reflects the doubts
among leading capitalists and politicians about which course to embark
on. The bed of roses promised in 2000 has not and will not materialise.
On the contrary, crises have followed.

The EU has been formed out of necessity for European capitalism. It is
an alliance of European big business, against capitalist competitors in
the US and Asia and against workers and welfare states on the home
ground. It is these objective needs which have pushed the politicians to
try and hold the EU together. At the same time, the inability of
capitalism to consistently develop economies and the national interests
of the capitalist classes themselves as well as the struggles of the
working class against them, all create crisis and stagnation. The Lisbon
process will achieve none of its stated aims to create jobs etc, but it
will still play a role in the attacks on workers‘ conditions.